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IMF warns against rush to bring manufacturing home after pandemic

Fund expects limited financial 'scarring' thanks to fast policy action

A factory in China: IMF officials say a drive by countries to bring manufacturing home from overseas would create a "vicious cycle."    © Reuters

TOKYO -- International Monetary Fund representatives on Thursday warned countries and corporations against the impulse to bring manufacturing home in the aftermath of the coronavirus pandemic, but struck an optimistic note about the fate of the financial sector.

Reshoring is "a vicious cycle that will shrink the global supply chain and the international division of labor, which will hamper productivity gains," Chikahisa Sumi, director of the IMF's Asia-Pacific regional office, said during a virtual seminar on Thursday.

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